The landscapes of Rembrandt glow with the great painter’s rendering of light. And they are distinctive for another reason: windmills are everywhere. As far back as the 13th century, the Dutch used windmills to drain their land and power their economy. And now, 800 years later, the Netherlands is again in the vanguard of what could be the next big thing, not only in wind power but also in the global energy system as a whole: offshore wind.

In December, the Netherlands approved a bid for its cheapest offshore project yet—€54.50 per megawatt-hour, for a site about 15 miles off the coast. Just five months before, the winning bid for the same site was €72.70. Denmark has gone even further, with an auction in November 2016 seeing a then record-winning bid of €49.90 per megawatt-hour, half the level of 2014.

Europe, which has provided considerable economic and regulatory support, accounts for more than 90 percent of global capacity. As a result, Europe now has a maturing supply chain, a high level of expertise, and strong competition; it is possible that offshore wind could be competitive with other sources within a decade. By 2026, the Dutch government expects that its offshore auctions will feature no subsidies at all. But it might be even sooner: in the April 2017 German auction, the average winning bid for the projects was far below expectations, and even less than the Danish record set only six months before. Some of the bids were won at the wholesale electricity price, meaning no subsidy is required.

Prices and costs

The industry still has a way to go compared with current costs: the levelized cost of electricity (or LCOE, a metric that incorporates total lifetime costs and expected production) for an offshore park installed in 2016 is expected to be €120 to €130 per megawatt-hour, about 40 percent more than onshore wind in comparable regions and 20 percent more than solar photovoltaics (PVs). Conventional sources, such as coal and gas, are currently even cheaper in many locations.

The technology thus still comes at a premium. Costs are higher because building at sea requires more materials for foundations and piles, while rough weather conditions make installation and maintenance expensive. Offshore wind parks also require expensive connectors to the inland transmission network.

While prices for all renewables will continue to drop, offshore wind is at an earlier stage of development, so its prices can be expected to fall further, faster, thus improving its competitive position. According to McKinsey research, when different wind farms are made comparable by normalizing for water depth, site preparation, subsidies, and other factors, this is already happening (exhibit).

One caveat: these are prices, not actual costs. Until the parks are actually built and running, it is impossible to know if they can be profitable at these prices. But companies would not be competing so fiercely—the Dutch auction saw 38 bids—if they didn’t think they could be.

Offshore wind has a number of advantages that can help to compensate for its higher costs. Specifically, it can be sited near densely populated coastal areas, where land can be costly, and its higher wind speeds produce more power per unit of capacity. Offshore also complements solar PV, because it produces well in winter when load is highest, creating a stable production profile, day in and day out, throughout the year. Offshore wind produces at 35 to 55 percent of capacity, versus 10 to 20 percent in the Northern Hemisphere for solar PV. Finally, the not-in-my-backyard (NIMBY) effect is considerably less when the nearest turbine is miles away at sea. However, when offshore parks are not placed far enough offshore, NIMBY can become an issue, with complaints of visual or horizon pollution.

Factors outside the industry’s control, including low interest rates and low steel prices, have played a major role in cutting costs. But so has better technology, especially the trends toward larger turbines and greater durability. Larger turbines harvest more of the wind, which make them more efficient. For many years, 3- to 4-megawatt turbines were standard; now 8- to 10-megawatt models are common, and by 2024, 13- to 15-megawatt models will likely hit the market. This reduces the cost per megawatt. Even as turbines have become larger, they have also become better. In the 1990s, the expected lifetime of offshore wind parks was only 15 years; now it is closer to 25 years, and new sites project an operational lifetime of 30 years.

One final piece of good news: as investors get more comfortable with offshore wind, financing risk premiums will come down.

Room for improvement

The offshore wind industry is still in the process of growing up and becoming more professional. There are a limited number of fit-for-purpose suppliers and vessels, for example, and owners, contractors, and subcontractors are still learning how to work together. There aren’t that many industry professionals who are experienced at completing offshore wind projects, and as parks get bigger, the need for such expertise is greater.

Scale itself will help. With more offshore farms being built, the economics of scale are beginning to emerge, in both logistics and along the supply chain, including such things as sharing crew transfer vessels, helicopters, and coordinating jack-up barges across assets and operators for major component replacements.

For offshore wind to fulfill its considerable potential, it needs to raise its game everywhere. The most promising opportunities are in design, procurement, and execution; operations; and innovative financing.

Engineering, procurement, and construction

Value-focused design involves working with all stakeholders, internal and external, to systematically identify technical improvements and value-creation opportunities. For example, the developer and supplier can get together to define the minimum technical solutions, ruthlessly eliminating high-cost, low-value specifications. Design optimization is another possibility. The standardization of components and designs across a single offshore wind site, or a fleet of them, reduces the costs of construction, installation, follow-up engineering, and debugging. Manufacturers can then use modular techniques to adapt to specific situations in a cost-efficient way.

Contracting and procurement could add up to 5 to 10 percent in cost savings. Contracting strategy begins with understanding exactly what is expected of the contractor with respect to technical delivery and added value, the complexity of engineering, and fit with the design requirements. Based on a rigorous risk assessment, the developer seeks the best delivery model and pricing structure and optimizes the contract terms to be consistent with this strategy. By brainstorming with the candidate contractors, then assessing their risk profiles, one onshore wind company saved at least 15 percent on the final proposals.

Applying procurement-excellence tools, such as clean-sheet costing, and creating a clear “package procurement” road map, can help to find the right price for the right product. At several companies, this rigorous purchasing approach has translated into 15 to 20 percent price reductions in the procurement of turbines.

By their nature, offshore wind platforms are costly to build, so improving project execution offers another avenue to cut costs, by 3 to 5 percent. Integrated performance management ensures that data is collected and shared throughout the project—from the owner to all the suppliers and all the subcontractors. Lean construction comprises a set of principles, operating practices, and methods that improve execution while minimizing waste. In offshore wind, examples include reducing delays in preparing foundations and increasing standardization in the assembly of components.

Operations and maintenance

Offshore wind developers vary widely in their operations and maintenance performance. The best drive down costs while maintaining high availability and safety standards; the rest tend to focus on availability and do not pay enough attention to costs. We estimate that for many projects, improved operations could translate into savings of as much as €10 per megawatt-hour in LCOE. Improved operations start with the relentless application of advanced analytics to improve predictive maintenance, condition monitoring, and component replacement.

Second, operators should establish flexible work contracts for offshore sites that are difficult to access, share technicians across sites, and find the right balance between internal and external technicians to contain labor costs while maintaining quality. Size and proximity to other parks does matter. Building new vessel-logistics concepts such as service-operation vessels, and sharing technicians and fleet with other sites (as done in the offshore oil and gas sector) adds a third opportunity to reduce costs.

Financing

McKinsey analysis shows that a one-percentage-point decrease in the cost of capital brings a 5 to 10 percent improvement in LCOE for renewables. To realize this advantage requires investors having a thorough understanding of the real risk profile that offshore wind assets have compared with other renewable or infrastructure assets.

Another way to reduce financing costs is to make the sector more attractive to a broader group of investors. Offshore wind investments are relatively “chunky,” requiring hundreds of millions of euros per park, and “illiquid,” meaning they are difficult to sell without incurring high transaction costs. To overcome these challenges, other asset classes have devised alternative structures, such as publicly traded or private YieldCos; these have had their challenges but can still be attractive. The industry could also consider new structures, combining features such as publicly listed versus private structures, single asset versus broader portfolios, and single-technology focus versus cross technology.

Reasons for optimism

The world’s first wind farm began operating in 1991: the Vindeby project featured 0.45-megawatt turbines. As of 2017, there is more than 14 gigawatts of cumulative installed capacity worldwide.

Other markets have taken note of Europe’s progress and are putting into place supportive regulation. China has made offshore wind part of its five-year energy plan. Korea, Poland, Taiwan, and a number of other countries are also considering offshore wind as part of their future energy mix. For example, a major project off the northeast coast of the United States is in the works.

Although in some areas of the world the LCOE of offshore wind may never become at par with, say, solar PV, the value it can bring—as less-intermittent baseload power generation near urban demand centers, offsetting supply deficits from solar PV in winter—can make it a valuable addition to the energy mix.

These brighter prospects have also led to increased interest from oil and gas companies, which are increasing their exposure to the sector. Offshore is a natural fit with their expertise in engineering and in executing complex energy projects in offshore locations.

Offshore’s considerable potential would be further enhanced if floating wind platforms could become cost competitive. Fixed-foundation wind parks have to be sited in relatively shallow waters; floating ones could be placed in deeper areas, farther from land, and could open additional markets. There is considerable research going on, with the first floating wind farm being built off the coast of Scotland.

Fast growth, increased investment, bigger parks, falling costs, and new technologies and markets: these are the trends that are defining the offshore sector. Put it all together, and it is fair to conclude that the wind is at the industry’s back.

About the author(s)

Arnout de Pee is a partner in McKinsey’s Amsterdam office, Florian Küster is a consultant in the Hamburg office, and Andreas Schlosser is an associate partner in the Munich office.

The latest draft version of the TTIP agreement could sabotage European efforts to save energy and switch to clean power, according to MEPs.

A 14th round of the troubled negotiations on a Transatlantic Trade and Investment Partnership (TTIP) free trade deal between the EU and US is due to begin on Monday in Brussels.

A leak obtained by the Guardian shows that the EU will propose a rollback of mandatory energy savings measures, and major obstacles to any future pricing schemes designed to encourage the uptake of renewable energies.

Environmental protections against fossil fuel extraction, logging and mining in the developing world would also come under pressure from articles in the proposed energy chapter.

Paul de Clerck, a spokesman for Friends of the Earth Europe, said the leaked document: “is in complete contradiction with Europe’s commitments to tackle climate change. It will flood the EU market with inefficient appliances, and consumers and the climate will foot the bill. The proposal will also discourage measures to promote renewable electricity production from wind and solar.”

The European commission says that the free trade deal is intended to: “promote renewable energy and energy efficiency – areas that are crucial in terms of sustainability”.

The bloc has also promised that any agreement would support its climate targets. In the period to 2020, these are binding for clean power and partly binding for energy efficiency, in the home appliance and building standards sectors.

But the draft chapter obliges the two trade blocs to: “foster industry self-regulation of energy efficiency requirements for goods where such self-regulation is likely to deliver the policy objectives faster or in a less costly manner than mandatory requirements”.

Campaigners fear that this could tip the balance in future policy debates and setback efforts to tackle climate change.

Jack Hunter, a spokesman for the European Environmental Bureau said: “Legally-binding energy standards have done wonders to lower energy bills for homes and offices, so much so that energy use has dropped even as the British economy has grown and appliances have become more power-hungry.

“Voluntary agreements have a place, but are generally ‘business as usual’ and no substitute for the real thing. If they became the norm, it would seriously harm our fight against climate change.”

Another passage in the draft text mandates that operators of energy networks grant access to gas and electricity “on commercial terms that are reasonable, transparent and non-discriminatory, including as between types of energy”.

This could create an avenue for preventing the imposition of feed-in tariffs and other support schemes to encourage the uptake of clean energy, according to lawmakers in Brussels.

The Green MEP Claude Turmes said: “These proposals are completely unacceptable. They would sabotage EU legislators’ ability to privilege renewables and energy efficiency over unsustainable fossil fuels. This is an attempt to undermine democracy in Europe.”

The environmental law consultancy, ClientEarth, was concerned that the new proposal effectively derogated responsibility for urgent climate change actions agreed at COP21 to the business sector.

“Industry is not the right entity to lead the fight against climate change,” said ClientEarth’s lawyer, Laurens Ankersmit. “It is madness for the EU and the US to rely on it in this way.”

The energy chapter negotiations began as part of an EU push for unlimited access to exports of the US’s relatively cheap liquefied natural gas, much of it derived from shale.

The EU is committed to a reduction in greenhouse gas emissions of at least 80% by 2050, as measured against 1990 levels – and pledged a 40% CO2 cut by 2030 at the Paris climate conference, last December.

But the new text says that: “the Parties must agree on a legally binding commitment to eliminate all existing restrictions on the export of natural gas in trade between them as of the date of entry into force of the Agreement”.

Other countries wanting to trade with the EU or US would also find themselves up against requirements that they remove trade barriers.

Drones will eventually be “as ubiquitous as pigeons,” London-based futurist Liam Young recently predicted. They are omnipresent already. Only five years ago drones belonged to the realm of the military, unaffordable for anyone else. Today, they are for hobbyists and even kids. Drones arrived in our lives and conquered the extreme ends of the market for technical goods. They proved to provide the best value for both, defense budgets and pocket money. Now the race is on to fill the gap in the middle: startups, corporates and analysts try to find the most promising commercial applications for drones. That is quite a challenge since drones can be used for a surprising variety of tasks. Much media attention was paid to Amazons’, Google’s and DHL’s announcement of using delivery drones. Others see the future for drones in surveillance, detecting fires, cracks in pipelines or illegal wood logging. They can also monitor farmland in detail for precision farming. Autonomous solar powered drones can also be used to hover at high altitude over an area for months to provide wireless communication similar to a satellite. Facebook and Google have invested in startup companies in this field. But there are other disruptive uses for drone technology which the current debate is largely unaware of.

One example is Elon Musk and his SpaceX company. He is working at landing and later reusing Falcon rockets after they have delivered their payload into space. It is impossible for a pilot to control a precision upright landing of a rocket that literally falls out of the sky. Only cutting-edge drone technology can do the job. If the rocket was to be recycled it would lower the flight costs from the cost of building a rocket to the cost of refueling it. That is $200,000 instead of $55 million.1 The business potential for the “rocket drone” would be enormous.

Or take Miles Loyd. In the energy crises of the late 1970s Miles Loyd worked as an engineer at Lawrence Livermore National Laboratory. He attempted to build the best wind generator imaginable.

He had the radical idea of building it without a tower, only using a flying wing connected to the ground by a tether, much like a kite. He calculated the expected energy output of his “flying wind generator”. Based on the formula he first established – today known as Loyd’s Formula – he found that a wing with the size, weight and aerodynamics of a standard plane wing of the 1970s could produce 6.7 MW of power. Even larger wings with an output of 45 MW seemed feasible. To put this into perspective: even today, 35 years later, the average wind turbine is still below 3 MW and the largest existing prototype has 8 MW. Loyd obtained a patent2 and published an article3 on this new technology.

And here the story ends. He could not convince investors to finance his flying wind generator, because he had no solution for one problem: how to control the flying wing without a pilot? Today, we have a technology that lets us control flying objects without a pilot. It is called: drones. If we can apply this new technology to Loyd’s old formula we can build a new type of drone: the wind drone.

WIND DRONE TECHNOLOGY

How exactly does a wind drone work? There is a great resemblance to kite surfers. Kite surfers use a kite and a tether to pull a surfer through the water. The same mechanism can be used to generate electricity. The tethered kite or wing is connected to a drum and a generator on the ground and the tether is wound around the drum. The wing tears at the tether and turns the drum to generate electricity. Once the tether is fully unwound, the wing nosedives and the tether is quickly reeled in. Then the cycle starts again. This up-and-down motion inspired the name “yo-yo” type wind drone (%%0815-IF-Drone-1%%).

Google X, overseen by Sergey Brin, is working on a different wind drone in its Makani4 project. Google’s approach is to use little propellers (mini wind turbines) and generators directly mounted on the wing where they produce electricity. An electric cable is woven into the tether and transfers the electricity to the ground. In 2013 Makani presented a working prototype. They already built their first scaled up product with 600 kW output and announced that it will fly in 2015.

Google will be the first team to show a wind drone with power outputs comparable to today’s wind turbines. But they are not the only ones who have realized that drone technology is ripe to take on Loyd’s formula. Companies including 3M, ABB, Alstom, E.ON, Honeywell, Statkraft and Softbank have conducted research on wind drones and/or financed one of the dozens of airborne wind energy startups worldwide. Some of the prototypes use soft wings resembling a surf kite or a paraglider, others use hard wings like the wing of an airplane. The designs also differ in many other details. A dominant design has not yet emerged. But irrespective of their final design, wind drones share three characteristics that could turn them into the killer application for drone technology: they will disrupt their market, they will be one of the first autonomous drone applications to be market ready and they will have the largest market of all drone applications.

DISRUPTING THE MARKET

Producing wind energy is not a new idea and we already have a tried and trusted device for this task: the wind turbine. Wind drones will have to offer significant advantages over wind turbines to conquer this market. Airborne wind energy companies claim that wind drones can be built at half the price of wind turbines. In addition, they claim that downtimes for wind drones will be significantly lower and wind drones therefore produce twice as much energy with the same rated power. According to their calculations energy from wind drones could therefore be available at just one quarter of the price of energy produced by wind turbines. But are such claims realistic?

COSTS

Can you manufacture wind drones more cheaply than wind turbines? The capital costs of a wind turbine which make up the bulk of the total costs of wind energy are the following (see %%0815-IF-Drone-2%%).5
The structural elements, the tower, the blades, the foundation and the rotor hub make up half of the total capital costs of wind turbines. Material requirements are extremely high: Up to 700 tons of steel for the tower,6 another 100 tons of steel for the rotor hub,7 up to 100 tons of glass-fiber reinforced plastic for the blades,8 and up to 4,000 tons of concrete for the foundation.

Wind drones lack theses massive structures. The tower is replaced by a thin tether. A wind drone with the power of the largest existing wind turbine (8 MW) requires a tether that is 2.5 inches/6 cm thick and would weigh less than one ton.9 Only minimal foundations are required and the wings can be much lighter requiring only 1 to 10 percent of the material of the blades of a wind turbine.10 The Google Makani 600 kW wing weighs below 2 tons including the tether and generators on board.11 A comparable 600 kW wind turbine weighs between 50 and 100 tons without foundation.

The required components for power generation are cheap in comparison: the costs for the electricity producing generator amount to less than 3 percent of total costs. Certainly, wind drones will need more and better sensors, processors and other control components, but these cost much less than the saved materials.

STOP BUILDING LEVER ARMS

How can a wind drone save half the costs of a wind turbine? It is all about physics. A basic construction principle in engineering is to avoid a 90-degree force on an unsupported lever arm wherever possible. Large bridges are therefore supported by arches, columns, or suspension tethers. If parts cannot be supported they have to be made as short as possible.

Wind turbine engineers have done the opposite. Rightfully wanting to build ever larger and more efficient wind turbines they worked to increase the height of the towers and the length of the blades. Both are lever arms in a 90 degree angle to the wind force and they are not supported. Wind engineers would love to tether the tower and the blades. But it is not possible. The wind can blow from all directions, so the rotor has to be able to rotate around the tower and the blades have to spin freely. Nonetheless, wind engineers have excelled in building ever larger wind turbines. They hold the record for building the longest unsupported lever arms in the world. Undoubtedly a great achievement, but one that does not help saving material. The tether of a drone can be 1,000 times lighter than the tower of a turbine simply because it avoids lever arms.

UNLEASH THE DRONES

A simple physical fact cuts costs in half. Can other physical facts double the output? Since wind drones are not restricted by lever arms they can fly higher. They easily reach altitudes twice as high as normal wind towers (300 m/1,000 ft. instead of 150 m/500 ft.). Physical facts: on average the wind speed increases with altitude; higher wind speed means more wind power; wind power increases with the cube of the wind speed. Double the wind speed therefore means wind power multiplied by eight (2³).

Altogether these physical facts lead to the conclusion that there is no such thing as a “bad location” for wind drones. Wind drones only know good and excellent wind sites. They will find enough wind at almost any site.

The impact of height differences can easily be illustrated by using wind data of Dresden, Germany (See %%0815-IF-Drone-3%%.12 At the altitude of wind turbines it is a very poor wind location. Not even with the support of the generous German feed-in tariffs does it allow economic energy generation. At wind drone altitude, the wind speed is 60 percent higher (grey columns). This does not sound spectacular, but due to the cubed relationship between wind speed and power the available wind power almost quadruples (blue columns).

At this altitude Dresden becomes an extremely windy place with a wind force only matched by few wind turbine locations such as coasts, mountains or offshore locations. The world’s largest offshore wind park London Array, has a comparable average wind speed of 9.2 m/s at 100-meter hub height.13 The reason is simple. Obstacles on land like forests, hills and buildings slow the wind down. Offshore winds partly owe their strength to the lack of obstacles. The same applies to high altitude winds: no obstacles to slow them down.

In addition, offshore or high altitude winds are steadier and therefore a more reliable source of electricity. Offshore wind turbines run at full capacity more often. Their idle periods per year are much shorter. Their so-called capacity factor is higher. They are therefore better suited to provide base load electricity. On average the output of offshore turbines is twice as high as that of onshore turbines with the same rated capacity.14 But since offshore turbines cost two to three times as much as onshore turbines, the advantage is quickly outweighed. Offshore wind energy is still more costly than onshore wind.15 According to research conducted by E.ON, Germany’s largest utility, offshore wind drones can boost offshore wind turbines’ high yields by another 50 percent. They can run at full capacity 70 percent per annum.16

In summary, wind drones have lower production costs, they can access much stronger high altitude winds and therefore run at full capacity for greater amounts of time. The estimate of many airborne wind energy startups seems realistic: electricity for a quarter of the price of today’s wind energy.

Google shares this belief in the cost-cutting power of wind drones. Google calculated that less than 16 percent of all the onshore U.S. sites are suitable for economic wind energy production with wind turbines. For wind drones this figure more than quadruples. 66 percent of the United States become viable.17

The higher capacity factor does not only lower the price, it also increases quality. The intermittency of most renewable energy sources causes a lot of concerns. Electricity grid operators face the challenge of matching the fluctuating production of renewables with demand. Current scenarios foresee the necessity to invest billions into stronger grids and energy storage. If wind drones can produce with a capacity factor of 70 percent as envisaged by E.ON, they could replace coal, nuclear and gas power plants without the necessity of massive new investments in grid and storage. Grid and distribution costs already make up for the greater part of our electricity bills. The high quality of wind drone power could become a decisive factor, even more important than its low cost.

TIME TO MARKET

The first wind drone prototypes are in operation. But when will they be market ready? Soon. Sooner than many other autonomous drones. The reasons: simplicity, safety, and the law.

ROUND AND ROUND WE GO

Various drones have various tasks which vary in difficulty. Wind drones are the ones with the easy job. They fly the same simple pattern, say a circle, over the same space over and over and over again. Conventional wisdom has it that robots and drones will first get into the dull, dirty and dangerous jobs. Sorry, wind drones, we cannot get you dirty and dangerous, but when it comes to dullness it is hard to beat your job.

Flying the same patterns over the same area means that the sensors know exactly what to expect, that the software has to know only a few flight patterns, and that the only variation can come from different weather, namely changes in wind speed and direction. And if the wind drone has to land for inspection or due to extreme weather, the landing site is also always nearby.

SAFETY (MAKES THEM) FIRST

No matter how simple a task, something can always go wrong and in case of flying objects the result can be a crash. To be a commercial success, every drone will have to prove that it is safe.
In the beginning wind drones will only be installed in controlled areas in the countryside, or over the sea, where unauthorized access is not allowed. If the public cannot access the flight area, the public cannot be harmed. This is the simplest recipe for safety. Amazon on the other hand might find it difficult to deliver its parcel to your doorstep while keeping a safe distance from people.

Wind drones also have a built-in safety feature that is unique to drones: They are kept constantly on the leash, pardon, tether. So even if all controls go out of control, wind drones can only crash within the area of the tether and will not do any harm outside.

Stationary operation and the strictly defined flight area of wind drones not only increase safety on the ground but also in the air. Wind drone parks can be included in air maps and turned into no-flight zones for low flying air traffic, just as wind parks are today. Air regulators have already honored the additional safety and special features of wind drones. A draft decree of the European airspace authority EASA has an exemption for wind drones (and other drones on the tether) allowing them to fly higher than other drones without the same restrictions.18 And under the new EASA “concept of drone operation”19 the degree of regulation will depend on a specific risk assessment for each use of drones. In case of operation in segregated areas, where drones do not pose a risk to the public, the operator might even approve its own risk assessment. Airspace regulators worldwide are currently working on regulation for drones. They will mostly use comparable flexible concepts, since applying existing strict regulation standards for manned aviation to drones would choke off the respective national drone industry without any safety benefits. So wind drones are not only safer in practice, but this additional safety in the air and on the ground will lead to much lighter regulations. This will make them faster, easier and cheaper to build than other more hazardous and therefore stricter regulated free flying drones or aircraft.

What is true for drones is also true for autonomous cars. Many believe that autonomous cars will become commercial reality in a few years. This is not true. Fully autonomous cars have long ago hit the market. They have been available for purchase since 2008. Where? At your local Caterpillar20 or Komatsu21 dealer, specialized in mining equipment. More and more mines are equipped with fully autonomous haul trucks, which transport rocks and minerals within the mine. Have the engineers at Caterpillar and Komatsu outclassed their counterparts at Google, GM, Tesla, BMW, Volvo, Toyota, Audi, Mercedes by launching their product a decade earlier? Not quite. Haul trucks perform limited and well defined repetitive tasks. They operate stationary in mines, which are controlled distant places with no access for the public. There is little or no regulation on their development and use. The conclusion for drones is obvious.

HUGE MARKET

The strongest argument for wind drones is their potential market: it is huge.

To begin with, the global wind turbine market is a large market. Its volume amounted to $80 billion in 2013.22 Its growth rate averaged 25 percent per year over the last decade23 and the market will continue to grow strongly. But wind drones are not limited to the existing market for wind turbines. A look at the top 20 global companies with the largest revenue as compiled by the Fortune Global 500 list24 illustrates their full market potential:

Energy is big business. But wind energy is still minuscule and accounts for less than 1 percent of total global energy use.25 This will change. And it is mostly a question of competitiveness. Onshore wind turbines are on the brink of becoming competitive with coal and natural gas. This so called grid-parity has been reached in some regions. It means that wind energy is already the cheapest source of electricity even without subsidies. Add wind drones’ potential to slash these costs to one quarter, add steadier production and add their ability to be deployed almost anywhere.

This means that wind drones cannot only compete with wind turbines in their niche but will become the cheapest source of electricity. Cheaper than coal, gas, nuclear and hydro power.

And since electric cars are on the rise, the electricity produced by wind drones will be able to play in the energy major league and compete with oil as a transportation fuel. And oil will have a hard time competing, even at the current “cheap” oil prices. Taking into account the inefficiencies of the combustion engine, oil at $60 per barrel is still a more expensive source of power for a car than the electricity produced by today’s wind turbines. Based on the analysis above, oil would have to sell at a quarter of that price, below $15 per barrel to compete with wind drone energy on a pure cost of fuel basis.

The digital revolution has disrupted many markets, created vast riches and young billionaires. But we have to bear in mind that the digital revolution has only taken place in very limited markets so far. The so-called digital giants Google and Facebook — and many others — are all competing for a share of the online advertising market. This market has a total global volume of $150 billion.26 Compare this to the annual average $2 trillion investment into energy supply required in the next 20 years according to the International Energy Agency.27 Compare this to the $3.4 trillion revenue that the 11 largest energy companies on the Fortune Global 500 list share. Or compare it to the total global energy market that is assumed to have a size of $6 trillion to $10 trillion. This is a difference in market size that could come close to a factor of 100. We cannot imagine what it will look like when the drones the digital revolution created take on the largest market of the world, the energy market.

WORLD CHANGING

We have illustrated how the laws of physics in combination with sensors, chips and smart algorithms can replace the tons of steel and concrete wind turbines are made of. This can make wind drone power cheaper than electricity from fossil fuels. Their ability to harvest stronger winds higher up in the air gives wind drones the potential to provide power where it is needed irrespective of the existing wind resource. Cost-effective electricity made by wind drones could even provide the basis for the clean synthetic fuels of the future. And this fuel could be available at less than today’s oil price.

A lack of wind will no longer be a problem. We have seen how the wind resource dramatically increases by doubling the altitude. But this is only the first humble hop of wind drones into the air. Once these altitudes are mastered, it will be tempting to gradually go higher, until they reach the jet stream at 10 km/33,000 ft. Before, many technical and legal problems will have to be solved. But it will be attempted. The wind resources at this altitude are simply too enticing. The median energy density over New York at this height is more than 10 kW/m² 28 of which about 5 kW/m² can be used.29 The total energy consumption per person in the U.S. amounts to 10.5 kW. This includes all electricity use, heating, car and aviation fuels, and even industrial energy consumption.30 This means that harvesting wind in an area of 2m² (22 sq.-ft.) per person, the size of an open front door, could on average provide all our energy. If 10 wind turbines with today’s dimensions were installed in that altitude over New York, they could have the same rated power as an average nuclear power plant, over 1 GW.31 High-altitude wind energy is not only an extremely concentrated source of energy, it is also abundant. It can provide about 100 times of today’s global energy consumption.32 High altitude wind energy could allow us to live a greener lifestyle without the need to reduce our use of energy. For the energy sector this could mean nothing less than finally solving the conflict between economy and ecology.

Burning fossil fuels started the industrial revolution. It enabled the advances of mankind in the last 200 years. Without fossil fuels feeding 7 billion people on this planet would be impossible. But fossil fuels also destroy and pollute nature, poison our cities and homes and cause an ever more dangerous climate change. Furthermore, our reliance on fossil fuels leads to unjustified wealth and power imbalances, to wars over their control and to undemocratic regimes.

When mankind started to burn fossil fuels it made a huge leap forward. When it stops to burn fossil fuels, it will make another big step towards a better world. Drones will help to bring this day much closer than most of us believe today.

Udo Zillmann is the founder and managing partner of Daidalos Capital GmbH, a fund management company that specialized in investing in airborne wind energy companies since 2010 and is currently raising its second special airborne wind energy fund. Mr. Zillmann is author of “Financing Strategies of AWE Companies” in the book “Airborne Wind Energy” (Springer, 2013) and a regular speaker on airborne wind energy. Mr. Zillmann holds degrees in law and business.

Germany’s share of renewable energy input into the gross national energy requirement is set to hit the 33% mark for 2015. Some 193 billion kWh will come from solar, wind, and other renewable sources for 2015, around a 20% increase on the previous year, according to the estimates from the Centre for Solar Energy and Hydrogen Research Baden-Württemberg (ZSW) and the German Association of Energy and Water Industries (BDEW).

The most significant increases have been in photovoltaic and wind energy: Wind outlets produced 47% more power up to Oct. 31 than in the same period last year, while photovoltaic sources had already beaten their total production for 2014 in the first 10 months of 2015, despite only modest increases in installations.

“Even if we don’t hit 33%, the overall increase in Germany’s renewable energy share is terrific news,” said Thomas Grigoleit, director of Energy, Environment and Resources at Germany Trade and Invest.

“Not only does it show how important this aspect is in terms of Germany’s Energiewende and climate change targets, it confirms Germany’s pioneering position in the industry. Germany is able not only to install this capacity but integrate it effectively into the grid.”

The piles under test are made of a cylindrical steel tube and their depth is adjustable to suit environmental and seabed conditions. The piles are one of the most commonly used foundations in the offshore wind market based on ease of installation in a variety of water depths.

The two testing sites, located in Cowden, England, and in Dunkirk, France, carried out tests on 28 piles. The purpose was to assess and validate new design methods development by a joint industry project PISA (pile soil analysis) for offshore wind farms. The PISA academic working group included Oxford University, Imperial College London and University College Dublin. The group supervised testing as the 28 piles were pulled sideways into the soil until failure occurred.

The two test sites involved feature diverse soils—clay till in Cowden and dense sand in Dunkirk, representative of surface soil conditions in the North Sea. Previous oil and gas engineering pile testing at both sites provided field and laboratory soil data. Results confirm that traditional design methods are conservative and that by reducing the quantity of steel in the foundation it may potentially reduce electricity production costs.

The testing was undertaken as part of the PISA research project and carried out by industry working group headed by DONG Energy including EDF, RWE, Statoil, Statkraft, SSE, Scottish Power, Vattenfall, Alstom and Van Oord. PISA operates under the framework of the Carbon Trust Offshore Wind Accelerator (OWA).

The PISA academic working group will analyze the data and deliver a final report to project partners in early 2016.

Scientists at GE Global Research spent the last four years building a more efficient wind turbine. The result rises 450-feet above the Mojave desert in California – almost half the height of the Eiffel Tower — and looks like it has a silver UFO stuck to its face.

It may appear strange, but you are looking at the future of wind power. The team explains how it came about.

In 2011, Mark Little, GE’s chief technology officer and the head of the GRC, challenged principal engineer Seyed Saddoughi and his team to build a rotor that could harvest more wind.

Michael Idelchik, who runs advanced technology programs at the GRC, gave them another clue: “Since we know that the inner parts of wind turbines don’t do much for energy capture, why don’t we change the design?”

The team came up with the idea of putting a hemisphere on the center part of the wind turbine to redirect the incoming wind towards the outer parts of the blades. “The biggest unknown for us was what size the dome should be,” Saddoughi says.

The group decided to do some experiments. They bought on the Internet a 10-inch wind turbine and a bunch of Styrofoam balls of different sizes, then took the lot to a wind tunnel at GE’s aerodynamic lab (see above). “By cutting the Styrofoam balls in half, we created our domes of different sizes and then stuck these domes on the center of the small wind turbine and ran our experiments at different tunnel air speeds,” Saddoughi says.

The team hooked up the turbine to their instruments and measured the amount of voltage it produced. “Invariably we got a jump in voltage output with the dome placed at the center of the wind turbine; albeit the increases differed for different size domes,” Saddoughi says.

The scientists reached out to a colleague who did simple computer simulations for them and confirmed that even a full-size turbine was more efficient with a nose upfront.

“Of course overjoyed by the very limited experimental and computational results, we wanted to come up with a name for this design, such that it really represented the idea – and was also something that everybody would remember easily,” Saddoughi says. “The team gathered in my office again, and after an hour of playing with words the name Energy Capture Optimization by Revolutionary Onboard Turbine Reshape (ecoROTR) was created.”

Saddoughi is attaching differently shaped noses and turbine blades in Stuttgart. All image credits: GE Global Research and Chris New (ecoROTR)

The team then built a 2-meter rotor model of the turbine and took it for testing to a large wind tunnel in Stuttgart, Germany. The tunnel was 6.3 meters in diameters and it allowed them to dramatically reduce the wall effects on the performance.

The researchers spent couple of months working in Stuttgart. “We conducted a significant number of experiments at the Gust wind tunnel for different tunnel air velocities and wind turbine tip-speed ratios with several variations of domes,” Saddoughi says. “The wind tunnel was also operated at its maximum speed for the blades in feathered configurations at several yaw angles of the turbine to simulate gust conditions.” They ran the turbine as fast as 1,000 rpm and carried out surface dye flow visualization experiments (see below).

When dye hits the fan. Saddoughi after the dye flow visualization.

When they came back in the second half on 2012, they started designing the actual prototype of the dome that was 20 meters in diameter and weighed 20 tons. The size presented a new batch of challenges. “Unlike gas or steam turbines that are designed to operate under a relatively limited number of set conditions, wind turbines must operate reliably and safely under literally hundreds of conditions, many of them highly transient,” says Norman Turnquist, senior principal engineer for aero thermal and mechanical systems.

They ran more calculations to make sure that GE’s 1.7-megawatt test turbine in Tehachapi, Calif., would be able to support the dome. They looked at performance during different wind speed and directions, storms and gusts. They also designed special mounting adapters and brackets to attach the dome. “The design looked really strange, but it made a lot of sense,” says Mike Bowman, the leader of sustainable energy projects at GE Global Research.

The team then assembled the dome on site. “Early on, it was decided that the prototype dome would be a geodesic construction,” Turnquist says. “The reason is simply that it was the construction method that required the least amount of unknown risk.”

For safety reasons, the workers assembled the dome about 300m from the turbine and used a giant crane to move it to the turbine base for installation. But there was a hitch. “After the adapters were mounted to the hub it was discovered that bolt circle diameter was approximately 8mm too small to fit the dome,” Turnquist says. The team had to make custom shims to make it work.

The dome went up in May on Memorial Day and the turbine is currently powering through four months of testing. “This is the pinnacle of wind power,” says Mike Bowman. “As far as I know, there’s nothing like this in the world. This could be a game changer.“

Wind turbines could be installed under some of the biggest bridges on the road network to produce electricity. So it is confirmed by calculations carried out by a European researchers team, that have taken a viaduct in the Canary Islands as a reference. This concept could be applied in heavily built-up territories or natural areas with new constructions limitations.

The Juncal Viaduct, in Gran Canaria, has served as a reference for Spanish and British researchers to verify that the wind blowing between the pillars on this kind of infrastructures can move wind turbines and produce energy.

The study is based in models and computer simulations, which were carried out by researcher Oscar Soto and his colleagues in Kingston University (London). Researchers have presented the wind turbines as porous discs in order to evaluate the air resistance and test different kind of configurations.

“As natural, the more surface is swiped by the rotor, the more power can be produced; however, it was seen that in small turbines the power rate per square meter is higher”, explains Soto, who considers that the configurations with two identical turbines would be the most viable to be installed in viaducts.

If only produced power was evaluated, the best solutions would be the installation of two wind turbines with different sizes – in order to embrace the maximum available space-, or even a matrix of 24 small turbines – due to their power production per surface unit and low weight-, but concerning to viability, the best option is the one which includes two medium sized wind turbines.

Results confirm that each viaduct presents specific energy possibilities and wind potential. In the Juncal Viaduct case, the evaluated power would be about 0,25 MW per wind turbine. So, with two turbines, the total power output would be 0,5 MW, which is classified in the medium-power range.

“This would be the equivalent to 450-500 homes average consumption”, says Soto, who adds: “This kind of installation would avoid the emission of 140 tons of CO2 per year, an amount that represents the depuration effect of about 7.200 trees”.

This research has been promoted by the Canarian company ZECSA. Researchers from Vigo University have taken part to analyze the electrical connections needed to develop the project, along with other researchers from Las Palmas de Gran Canaria University, who were in charge of the integration in the scope of renewable energies “.

In fact, the study has been published in the Renewable and Sustainable Energy Reviews and it is framed in PAINPER, a public infrastructures exploitation plan to boost the use of renewable energies.

“PAINPER is an initiative which emerges from the difficulties seen in the implantation of this kind of energies in heavily built-up territories, as well as protected areas with low available space for new installations”, says Aday C. Martín, manager at ZECSA, who considers that renewable energy produced in wind turbines under viaducts could be added to energy from other wind, solar, geothermal and biomass installations.

The Pacific Ocean is warming at a rate faster than anything seen in the last 10,000 years and we may have the warmest Arctic in the last 120,000 years. We’re told to brace for more and worse droughts, floods, heat waves, and storms. Coastal communities may disappear from rising seas, entire island nations are going under.

The bright side is that we aren’t being blindsided by an unknown enemy: Our relentless burning of fossil fuels is the big thing pushing us toward the brink. So it would figure that a solution to get us out of this mess would be pretty obvious.

That’s why it’s great that there are people like Mark Z. Jacobson, a professor of civil and environmental engineering at Stanford University. While it is one thing to say we want to stop burning fossil fuels, Jacobson (and a team of researchers) are telling us how to do it.

A proposed offshore wind farm off Sai Kung might not see its blades rotating for at least another two years after the city’s largest power producer decided to extend a feasibility study into its economic viability and technical design.

The wind farm, proposed by CLP Power for construction near the Ninepin islands, was once said to be the city’s most ambitious renewable energy project and was targeted for completion by 2016. But the firm now appears to be taking a more cautious approach to the project.

Offshore wind farms in Hong Kong can hardly be described as feasible (HK Magazine)

Richard Lancaster, chief executive of CLP Holdings, the firm’s parent company, said the group had already spent 10 years looking into how to build a wind farm in Hong Kong, but it did not want to make a hasty decision.

“The decision has to be taken quite carefully as it is a big investment. We need to make sure the costs are fully understood,” he said at the World Energy Congress in South Korea last week.

Lancaster said more solid wind data would be required to confirm the project’s economic feasibility, and that a couple more years of study were needed.

The lengthening of the study means the multibillion-dollar project is unlikely to be part of the five-year development plan the company submitted to the government earlier this year.

Construction of the infrastructure for the wind farm would boost the value of the firm’s fixed assets, which is the basis on which its maximum permitted profits by the government are calculated. The greater the asset value, the higher the return allowed.

The firm is facing uncertainty ahead of the expiration of the current regulatory regime for the power industry, also known as the Scheme of Control Agreement, in 2018. A decision will likely be made before 2016 on whether the electricity market will be liberalised.

CLP estimated in 2011 that a 200 megawatt wind farm with up to 67 turbines would cost up to HK$7 billion and would lead to a 2 per cent rise in customer tariffs.

Lancaster said he would prefer the wind farm, if it were accepted, be paid for by all the company’s electricity users.